SUNDAY UPDATE

 

“I feel like it’s the only thing I ate in April!”

I updated some 2018 files this weekend over in “Download Links” in the 

right-hand column, and below is the updated PAMM spreadsheet. I’m glad 

April is over, cuz it was a cruel month to get ripped … I’m not sayin’ all of the 

loss for the month was due to slippage, cuz there was a hefty dose of “stupid 

shit” disease floating around that I happened to catch, but it still irks me some, 

of the DOW30 & GBPJPY fills that were simply frickin’ atrocious … “sure, it’s 

water under the bridge, and I’m happy not to be trading either of those markets, 

cuz they become untradeable the second they go extra volatile … spreads increase, 

and the slippage “baked into the HAL9000 fill cake” goes into overdrive, and no 

matter what you do, they’re gonna take their pound of flesh from you on both 

sides of the trade … it is what it is, and unless you want to trade futures, which I 

most definitely don’t want to do cuz that means I would have to manually allocate 

futures contracts cuz you can’t split contracts inside a MAM/PAMM, you’re then 

stuck trading with the bank, and they can give you any fill they want on a stock 

indices CFD or FX non dollar cross … anything … no matter how criminal”.

And while there aren’t any futures contracts with FX crosses to keep anybody 

honest, all anybody has with them is the bank’s reputation for fairness and not 

being to far off the actual spot interbank market … “yea, good luck with that”.

So far, the “new” LP’s in GBPUSD have been excellent … some of the trades 

I’ve done have been off the market by a few tenths of a PIP, which is totally 

normal in a fast paced changing market, but I don’t feel like we’ve gotten 

ripped or been given bad fills… anyway, we shouldn’t experience going 

forward the problems faced in April, and that’s good news.

Cousin It is working on some new theories in GBPUSD, tieing in research he’s 

doing with the Cable algorithm … we’re simply “brainstorming” on a daily 

basis and attempting to make the algorithm better and more efficient. One of 

the things that started this, was the fact that I have had this algorithm in Cable 

since the days of Jimmy Carter, and the start of GBPUSD futures trading all 

those moons ago … and what’s different now from back then?

I’d have to say the biggest difference is the amount of information available to 

the market almost instantaneously via current technology … markets trade the 

same, but today’s markets are much more proficient in processing and then 

pricing any event into the market in seconds. Ok, so what does that  mean 

exactly?

I think it means we all have to be better at spotting changes in short term trend 

to beat the HFT algo’s, cuz they are here now “in spades”, and they weren’t 

around back-in-the-day … and when they sense “blood in the water”, when it 

comes to big money order flow and/or “panic” liquidation, they pounce with a 

ferocity not seen before in markets, and their attitude is very much, “you 

snooze you lose”, and they are not willing to allow Cable to retrace or correct, to 

catch its breath, and/or give anybody a chance to either get out or establish new 

positions … “you’re either there to board when the profit train leaves the station, 

or the doors close and you’re toast”, and what that means for us as traders, is we 

need to be a fraction “more early” on entry, and then give it room to breathe 

some before liquidating, and then definitely being there to liquidate on the large 

spikes.

So, what Cousin It is working on is this premise above, tied into the existing 

Cable algorithm, and with high powered computer systems to do the number 

crunching on a scale that was unimaginable back when I developed it originally, 

we can literally do a thousand years of manual “pencil, paper, & calculator” 

research in a weekend today, and within a week or two have the probability 

assessments in a spreadsheet to look at and analyze how we want to attack this, 

or any market, we trade. Bottom line is, I think this makes perfect sense, and 

explains a good deal of market action that nobody seems to be able to capture 

cuz of the “speed of light … crickets” nature of moves today, especially in 

markets like GBPUSD.

And just to put some frosting on this cupcake, on Friday given all the “good 

news” Cable had to rally with on a big NFP miss, after the first small move up, 

and then it started to fall, in my mind I was thinking, “oh shit, this stuff should 

be rallying, and they should be taking out buy stops … they aren’t … market is 

being sold, and somebody or group of somebody’s is saying look out below! 

… and whoever it was, gave no quarter for the market to breathe, and before even 

the conventional timing indicators turned, which were still showing “all is well”, 

all wasn’t well, and I knew it right then it was toast”! … a few minutes later and 

it’s 60 - 80 PIPS lower … and it’s that few seconds during the market turn, that 

I want Cousin It to focus, cuz that’s where the easy money is made … so, I’ve 

got him looking at literally tens of thousands of previous example turns, and 

we’ll see what he comes up with … future blog posts I’ll share the results.

And what’s amazing to me, cuz they both are starting to think like traders, is 

that CoS [Chief of Staff] Milton Waddums is doing, or has been doing much the 

same thing in crude oil … both Brent & WTI … and is killing that market in 

front month futures … so, they’re both collaborating now, and we’ll await the 

 “fruit loops” results as they come in. It’s tough getting info from Milton, unless 

of course you hold his red stapler hostage, but what he’s shared from his 

findings that I steered him into in crude oil, is very promising for GBPUSD, 

cuz they share some of the same market craziness characteristics … not all to 

be sure, but close enough to warrant attention and look at seriously, and 

Cousin It is doing that as well.

So, a lot going on here … make no mistake, nobody here is amused or happy 

with either the “slippage circus” that went through town in April, the losses as 

a result, or the action in Cable where the big moves come “out of the blue”, and 

then leave us standing muttering, “WTF was that”? I’ll always try and make 

things better, cuz it’s in my nature ,.. And with that, I’m outta here ‘till 

tomorrow … until Monday mi amigos … Onward & Upward!!

Pamm spreadsheet is updated directly below.

 

Have a great rest of your weekend everybody!

-vegas

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